History, Politics, Economy and Startups in Togo.

Togo is a country which sticks to its rulers.

In 16th century Togo was part of the infamous “Slave Cost” from where estimated 2 to 3 million African slaves started their gruesome voyage to both Americas. From 1905 to the end of World War II Togo territories was part of the German colony of Togoland. In 1959, part of Togoland had joined the French Union and, then, in 1960, became the independent state.

After the prolonged period of internal unrests, in 1967Sergeant Etienne Eyadema Gnassingbe came to power in Togo as a result of military coup d’etat. Until unexpectedly leaving the country in the airplane to his final destination on 5 February 2005, the longest-serving dictator in Africa — Gnassingbe — had reigned in the Togolese Republic for 38 years. Today, after more than 11 years after his departure, Togo still unable to find the way out of self-perpetuating political and economic limbos.

Results of the Gnassingbe’s Presidential longevity record are controversial at best. On the one side, under his rule Toga became one of the most politically stable countries on the African Continent with self-sufficient agricultural industry and growing phosphate mining sector. On the other, despite ambitious government sponsored investment projects undertaken in 1970th and 1980th, Toga’s civic infrastructure remained largely undeveloped, its mostly rural population stayed poor and its financial system ruined. On top of that, the sudden end of the dictatorial system has left Toga absolutely unprepared for making a transition to the multi-party democracy.

After July 2013 elections Togo’s unicameral 91-members Assemblee Nationale is overwhelmingly dominated by Union pour la Republic or UNIR which has 62 seats, denying opposition forces (among which the most visible is the Union des Forces du Changement which has only 3 seats) any real political power. As a result, the political situation in the country has became dangerously tense with opposition accusing the government in the wide spread corruption and election results rigging and the government cracking down on opposition with unannounced police raids.

More than halve of Togo’s population are employed in agriculture. Coffee, cocoa beans and peanuts provide for more than 30% of country’s export. Togo has fourth largest deposits of phosphates in the World. However, non of that is a particularly good news for local tech founders.

Despite its natural riches this country’s population remains largely poor (per-capita less than $700) with 65% of it living in rural areas. On top of that, falling commodities prices had significantly worsened country’s economical situation in the past decade.Internet penetration rate in Toga stays below 10% (although, it grows at respectable 10% a year rate) and its telecommunication infrastructure is mostly out-of-date.

Decades of the political uncertainties, followed by imposition of heavy government’s control over all forms of economic activities hadn’t provided Togo with strong fundamentals on which to built the prosperous startup ecosystem. As a result, local high-tech entrepreneurs can today rely only on themselves and can’t expect quick returns on their investments.

Business Notes for Startups Founders:

  • political climate: not friendly;
  • economic climate: not friendly;
  • regions to focus: locally;
  • industries to focus: e-commerce, FinTech;
  • major limitations: poor population, excessive regulation, over-concentrated natural resources-based economy;
  • opportunities: young, growing population, low competition.

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